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Groupon shares were on sale on Wednesday after the struggling deals website reported first quarter revenues that badly missed Wall Street estimates.

Revenue for the three months to end of March fell 3.5 per cent to $673.6m, well short of analyst expectations for a rise to $723.3m.

Shares in the company – already down 85 per cent from their 2011 peak – tumbled 10 per cent in pre-market trading in response.

Groupon, based in Chicago, pioneered a business of offering daily coupon deals for local merchants on the web. But the company has struggled in recent years amid competition from copy-cat sites and also consumer fatigue from the endless barrage of email offers hitting their inboxes. The company itself has also made strategic missteps, expanding too fast and too far.

Under Rich Williams, who took over as chief executive in December 2015, Groupon has moved to close marginal operations in a number of countries and has laid off staff.

The company said it added 500,000 new customers in its core North American market during the quarter and total global active users now number 48.3m.

Still Groupon continued to to bleed red ink during the first quarter. Net loss narrowed to $24.4m, or 4 cents a share, compared with a year ago loss of $49.1m, or 8 cents a share.

Adjusted for one-off items, net income of 1 cents a share was better than the 1 cent loss the market had predicted.